SUPERIOR COURT OF JUSTICE ONTARIO. LOBLAW PROPERTIES LIMITED and CHOICE PROPERTIES LIMITED Plaintiffs - and-

Transcription

1 CITATION: Loblaw Properties Limited v. Turner Fleischer Architects Inc., 2017 ONSC 6127 COURT FILE NO.: CV MOTION HEARD: REASONS RELEASED: BETWEEN: SUPERIOR COURT OF JUSTICE ONTARIO LOBLAW PROPERTIES LIMITED and CHOICE PROPERTIES LIMITED Plaintiffs - and- TURNER FLEISCHER ARCHITECTS INC., CPE STRUCTURAL CONSULTANTS LIMITED, CARWELL CONSTRUCTION LIMITED, METRO CONCRETE FLOORS (1990) INC., INNOCON INC., HOLCIM (CANADA) INC. C.O.B. DUFFERIN CONCRETE, TORONTO INSPECTION & TESTING SERVICE INC. and JOHN DOE NOS Defendants BEFORE: COUNSEL: MASTER M.P. McGRAW J. Lancaster and N. Kharouba jlancaster@fasken.com -for the Moving Party Defendant CRH Canada Group Inc. (formerly Holcim (Canada) Inc.) c.o.b. Dufferin Concrete C. Reain and R. Tinney creain@mrltlaw.com -for the Proposed Defendant Thermo Design Insulation Inc. B. M. Martin bmartin@moodiemair.com -for the Proposed Defendant Toronto Inspection Ltd. C. Freeman-Shaw cfreeman-shaw@gibbslaw.ca -for the Proposed Defendant Toronto Inspection & Engineering Services Inc. and the Defendant Toronto Inspection & Testing Service Inc. K. Kirkpatrick

2 kkirkpatrick@blg.com -for the Plaintiffs Loblaw Properties Limited and Choice Properties Limited M. Rodrigues meryl.rodrigues@rogerspartners.com -for the Defendant Carwell Construction Limited A. Simoes asimoes@millerthomson.com -for the Defendant Turner Fleischer Architects Inc. R. Shastri rshastri@ksllp.ca -for Euclid Admixture Canada Inc. REASONS RELEASED: October 13, 2017 I. Background The Motion Reasons For Endorsement [1] This is a motion by the Defendant CRH Canada Group Inc. (formerly Holcim (Canada) Inc.) c.o.b. Dufferin Concrete ( Dufferin ) pursuant to Rules 5.04, 26.01, and in which Dufferin seeks leave to: (i) (ii) (iii) amend the title of this action to reflect its name change to CRH Canada Group Inc.; amend the title of this action to correct the names of John Doe Nos. 1, 2 and 3 to the proposed defendants Toronto Inspection Ltd. ( TIL ), Toronto Inspection & Engineering Services Inc. ( TIES ) and Thermo Design Insulation Inc. ( TDI, collectively with TIL and TIES, the Proposed Defendants ); and amend its Statement of Defence and Crossclaim and each of its Defences to the crossclaims against it to reflect its name change and to particularize its crossclaims against the Proposed Defendants. [2] In seeking this relief, Dufferin requests a novel application of the doctrine of misnomer. Misnomer motions are more commonly brought by plaintiffs, typically in personal injury actions, where a defendant whose identity was unknown to the plaintiff at the time of pleading was initially named as John Doe or Jane Doe and is subsequently identified. Here, not only is Dufferin a Defendant, but Dufferin seeks to assert crossclaims in a $15,000,000 action with 6 related actions arising from the construction of a 1.1 million square-foot food distribution centre (the Facility ).

3 - 3 - The Parties and the Project [3] The Plaintiff, Choice Properties Limited ( Choice ) is the owner of the Facility and an Ontario corporation. Choice is a wholly owned subsidiary of Loblaw Properties Limited ( LPL, collectively with Choice, Loblaw ). LBL is an Ontario corporation which is a property developer for its parent company, Loblaws Companies Limited. [4] The Facility, located in Ajax, Ontario, was constructed in 2 phases: Phase 1, construction of the concrete slab on grade floor (the Slab ), racking area aisles, storage and loading docks and storage for dry groceries and wet produce, commenced on or about December 4, 2006 and opened on or about April 20, 2008; and Phase II, expansion of the Facility including additional refrigeration space, freezer storage rooms and freezer shipping and receiving areas commenced in or about June 2010 and was completed in or about March 2011 (collectively, the Project ). [5] LBL retained the Defendant Turner Fleischer Architects Inc. ( Turner ) by purchase order to provide architectural and engineering consulting services with respect to the design and construction of both Phases. Turner subsequently entered into separate contracts for both Phases with the Defendant CPE Structural Consultants Limited ( CPE ). [6] LBL and Choice each entered into numerous contracts with the Defendant Carwell Construction Limited ( Carwell ) for the construction of Phase I and Phase II, respectively. Carwell subsequently entered into subcontracts with Metro Concrete Floors (1990) Inc. ( Metro Concrete ), Dufferin and TDI, among others. [7] The Defendant Toronto Inspection and the Proposed Defendants TIL and TIES (collectively, the Toronto Inspection Entities ) are all Ontario corporations. Hari Goel ( Hari ) is the principal of Toronto Inspection and his sons, Sanjay Goel ( Sanjay ) and Sandeep Goel ( Sandeep ) are the principals of TIL and TIES, respectively. Some or all of the Toronto Inspection Entities provided concrete quality testing, inspection and reporting services with respect to the Project. [8] LBL retained the Defendant Toronto Inspection and, it appears, TIES with respect to concrete testing and inspection related to the Project. There was no written contract or agreement between LBL and any of the Toronto Inspection Entities and it appears as if all instructions from LBL were provided verbally. Further, there are references to multiple Toronto Inspection Entities in reports provided to Loblaw. [9] Dufferin is a Quebec corporation registered extra-provincially in Ontario which is a concrete supplier. Dufferin supplied concrete for Phase 2 pursuant to a subcontract with Metro Concrete. [10] TDI is an Alberta corporation which specializes in the supply and installation of

4 - 4 - insulation for cold storage systems. TDI was an insulation subcontractor on Phase II for the Defendants Carwell and Metro Concrete. TDI supplied and installed insulation on the underside of the Slab for two freezer areas, provided insulated metal panels in the cold storage area and installed insulation in sprinkler rooms. The Main Action [11] Loblaw commenced this action by Notice of Action issued April 4, 2013 and subsequently issued a Statement of Claim dated May 3, Loblaw claims $15,000,000 in damages for breach of contract and negligence with respect to alleged defects with the Slab (the Main Action ). In addition to the identified Defendants (the Identified Defendants ), Loblaw named certain unidentified Defendants as John Doe Nos (the John Doe Defendants ). [12] Loblaw first became of aware of deficiencies with the Slab in or about November 2010, including breakdown of the concrete, but was not aware of the full extent of the Slab deficiencies until on or about June 20, [13] Paragraph 18 of the Notice of Action and the Statement of Claim states as follows: The John Doe Defendants are consultants, sub-consultants, contractors, subcontractors, suppliers, workers, inspectors or other whose identities and addresses are currently unknown to Loblaw, who were responsible for the design, construction, supply, installation, inspection, field reviews and/or related work for the construction of the Distribution Centre, including without limitation work related to the concrete slab on grade. The identities of these Defendants are currently unknown to Loblaw, but should be known to some or all of the other Defendants. [14] Loblaw s claims against the John Doe Defendants are particularized at paragraphs and of the Statement of Claim: 55. Loblaw pleads that the John Doe Defendants each owed an independent duty of care to Loblaw to use all skill, care and diligence and competence in performing its work to ensure the Distribution Centre was constructed without deficiencies. Further particulars of the duties of care owed by the John Defendants will be provided prior to trial. 56. Loblaw states that the Concrete Slab was designed and constructed in a substandard manner, utilizing an inappropriate design and/or inappropriate materials and/or construction methods, which caused numerous defects and deficiencies in the Concrete Slab (the Concrete Slab Deficiencies ). Furthermore, the Concrete Slab was inadequately inspected.

5 Loblaw states that the John Defendants were negligent and breached their duties of care as described in paragraph 55 above, causing damage to Loblaw as pleaded herein. 74. The Plaintiffs claim payment from the Defendants for all sums, damages, costs, expenses and losses resulting from, arising out of, or related to the Concrete Slab Deficiencies, resulting from the acts and omissions of the Defendants. 75. As a result of the breaches of contract and negligence, Loblaw has suffered damages, and furthermore, is at risk of suffering further damages, including, without limitation:.all of which Loblaw claims from the defendants, or any of them. 76. Loblaw pleads and relies upon the provisions on the Negligence Act, R.S.O. 1990, c.n.1, as amended. 77. The Plaintiffs plead that the Defendants are jointly and severally liable to the Plaintiffs in contract and/or for their negligence with respect to the Concrete Slab Deficiencies. [15] All of the Identified Defendants except Carwell have crossclaimed against the John Doe Defendants in the Main Action however, none of them have identified the John Doe Defendants in their Statements of Defence and Crossclaims. [16] In paragraph 3 of its Statement of Defence and Crossclaim dated March 4, 2014, Dufferin pleads that it has no knowledge or insufficient knowledge to plead with respect to the allegations set out in paragraphs 55 and 73 of the Statement of Claim regarding the John Doe Defendants. [17] In his affidavit sworn March 2, 2017, Robert Paisley, a Field Services Representative of Dufferin during the Project who was on site for most of Dufferin s concrete deliveries, states that Dufferin did not engage in the construction, installation, inspection and/or field review services with respect to the design and construction of Phase II. At paragraph 5 of his affidavit, Mr. Paisley states as follows: Dufferin Concrete personnel were not involved in the placement of the concrete inside of the building. Dufferin Concrete was not aware of who was inside given that the Distribution Centre s walls were up and the roof was on at the time that Dufferin Concrete delivered the concrete. During concrete pours, I would often enter the building to confer with Metro on matters such as concrete flow. Other than Metro, I do not recall who the others in the building were. The Related Actions

6 - 6 - [18] After the commencement of the Main Action, the following 6 related actions were commenced with respect to the Project and the Slab (collectively, the Related Actions ): (i) (ii) (iii) (iv) (v) (vi) on March 13, 2014, the Defendant Innocon Inc. ( Innocon ) commenced a Third Party Claim against The Euclid Chemical Company which is not a party to the Main Action (Court File No.: CV A1)(the First Innocon Action ). The First Innocon Action has not been defended; on April 23, 2015, the Defendant Turner commenced a separate action against TIL and TIES along with 5 other defendants who are not parties to the Main Action (Court File No. CV )(the Turner Action ). Only TIL and TIES have defended the Turner Action. TIES has crossclaimed against all codefendants except TIL and TIL has crossclaimed against all co-defendants. The crossclaims have not been defended; on May 1, 2015, the Defendant CPE commenced a Third Party Claim against TIL, TIES, Euclid Admixture Canada Inc. and 3 other defendants who are not parties to the Main Action (Court File No. CV A2)(the CPE Action ). Only TIL and TIES have defended the CPE Action. TIES has crossclaimed against all co-defendants except TIL and TIL has crossclaimed against all codefendants. The crossclaims have not been defended; on May 8, 2015, Innocon commenced a separate action against TIES, John Doe Consulting Inc. and John Doe Consultant along with 1 other defendant who is not a party to the Main Action (CV )(the Second Innocon Action ) which has not been defended; on May 8, 2015, the Defendant Carwell commenced a separate action against TIL, TIES and TDI and 3 defendants who are not parties to the Main Action (CV )(the Carwell Action ). Only TIL has served a defence and crossclaim and the crossclaim is against all defendants except TIES. TIES has only served a notice of intent to defend; and Innocon commenced a separate action against Euclid Admixture Canada Inc. and TIL (CV )(the Third Innocon Action ). Only TIL has defended the Third Innocon Action and crossclaimed against Euclid Admixture Canada Inc. Identification of the Proposed Defendants [19] In correspondence between counsel for Dufferin and Loblaw on July 15 and 31, 2015, Loblaw s counsel confirmed that the defendants in the CPE Action, which include TIES and TIL, were some of the John Doe Defendants in the Main Action. Loblaw s counsel also advised that, as of that date, Loblaw was not aware of any other potential John Doe Defendants other than those identified by the Identified Defendants in the Related Actions. By message dated August 4, 2015, Dufferin s counsel requested that Loblaw amend their Statement of Claim to identify the John Doe Defendants by name as soon as possible. [20] Notwithstanding numerous requests by Dufferin s counsel over the following 6

7 - 7 - months, Loblaw did not take any steps to amend their Statement of Claim to add the Proposed Defendants. Accordingly, on November 29, 2016, Dufferin s counsel circulated a draft order to amend the Statement of Claim on consent. When consent of the parties was not forthcoming, Dufferin scheduled this motion on December 20, Case Management [21] This matter first came before me on June 20, 2017 on Loblaw s motion seeking case management. Pursuant to my Order and Endorsement dated June 20, 2017, I assumed case management responsibility for this matter and approved a timetable which I amended with the assistance of counsel. [22] I also scheduled this motion which is necessary to resolve the issues in dispute between Dufferin and the Proposed Defendants so that the pleadings can be amended, if necessary, and this matter can proceed in compliance with the timetable which provides for mediation, examinations for discovery and a set down date of November 30, II. The Law and Analysis Generally [23] Rule 5.04(2) states as follows: At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. [24] Rules and provide as follows: 28.01(1) A defendant may crossclaim against a co-defendant who, (a) is or may be liable to the defendant for all or part of the plaintiff s claim; (b) is or may be liable to the defendant for an independent claim for damages or other relief arising out of, (i) a transaction or occurrence or series of transactions or occurrences involved in the main action, or (ii) a related transaction or occurrence or series of transactions or occurrences; or (c) should be bound by the determination of an issue arising between the plaintiff and the defendant. R.R.O. 1990, Reg. 194, r (1). (2) A defendant who claims contribution from a co-defendant under the Negligence Act shall do so by way of crossclaim.

8 A crossclaim shall be included in the same document as the statement of defence and the document shall be entitled a statement of defence and crossclaim. [25] Rule provides as follows: On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment [26] Rule provides that: A party may amend the party s pleading, (a) without leave, before the close of pleadings, if the amendment does not include or necessitate the addition, deletion or substitution of a party to the action; (b) on filing the consent of all parties and, where a person is to be added or substituted as a party, the person s consent; or (c) with leave of the court. [27] Section 138 of the Courts of Justice Act (Ontario), R.S.O. 1990, c.c.43 states: as far as possible, multiplicity of legal proceedings shall be avoided. [28] This motion also engages Rule 1.04(1) which provides that the Rules of Civil Procedure shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits and Rule 1.04(1.1) which requires the court to make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding. [29] The doctrine of misnomer requires a finding that the proposed defendant said to have been identified by the pseudonym or fictitious name ie. the John Doe or Jane Doe, would have known upon receiving the claim that that the litigating finger was clearly being pointed at them (Ormerod v. Strathroy Middlesex General Hospital, 2009 ONCA 697; Spribille v. Rockcliffe Nursing Home, 2010 ONSC 5408; Ontario Inc. v. PCS Security Systems Inc., 2014 ONSC 4433; Mohabir v. Mohabir, 2014 ONSC 5484). This test has been characterized as, would a reasonable person receiving and reviewing the claim, in all the circumstances of the case, and looking at it as a whole, say to himself or herself: of course it must mean me, but they have got my name wrong? (Mohabir at para. 13) [30] To determine if a case falls within the misnomer category, an assessment of the statement of claim is seminal in defining whether there is a litigating finger such that the proposed defendant knew that he/she was the intended defendant or if the claim aims itself at a moving target (Urie v. Peterborough Regional Health Centre, 2010 ONSC 4226 at para. 107; Spribille at para. 8). Vagueness and non-specificity weigh heavily if not definitively against a finding that misnomer is present and general assertions are contrary

9 - 9 - to the litigating finger test and ripe for the moving target test (Urie at para. 108). [31] In Mazzuca v. Silvercreek Pharmacy Ltd., 2001 CarswellOnt (ONCA), the Court of Appeal stated as follows at paragraphs 23 and 62: The combined effect of Rules 26.01, 5.04 and 1.04(1) generally is to focus the issue of non-compensable prejudice in the wider context of the requirement that a liberal construction is placed on the Rules to advance the interests of timely and cost-effective justice in civil disputes. Where the evidence establishes that the party to be affected by the amendment has not been misled, and will not suffer non-compensable prejudice other than that occasioned by the inability to rely on the limitation defence, amendments to pleadings have been permitted following the expiry of limitation periods, including amendments designed to add, delete or substitute plaintiffs or defendants. [32] The doctrine of misnomer applies notwithstanding the passage of a limitation period (Stechyshyn v. Domljanovic, 2015 ONCA 889). As set out at paragraphs 1 and 19 of Stechyshyn: On a motion to correct the name of a defendant on the basis of misnomer, as long as the true defendant would know on reading the statement of claim he was the intended defendant, a plaintiff need not establish due diligence in identifying the true defendant within the limitation period. If the respondents on the motion for misnomer had raised the issue of due diligence, they would not have succeeded. The respondent Domljanovic would have known on reading the statement of claim that he was the intended defendant. The jurisprudence is clear that, in such circumstances, due diligence does not apply. In Kitcher, the name of the correct defendant was in the plaintiff s solicitor s file. In Lloyd, the name of the correct defendant municipality was readily ascertainable by typing in the location of the road in issue. The law that governs the addition of a party after the expiry of a limitation period does not apply. [33] As Master Glustein (as he then was) stated in Skribans v. Nowek, 2012 ONSC 532 at paragraphs 41-42: 41.If the doctrine of misnomer applies despite the passage of a limitation period, to require evidence of effort to identify a tortfeasor would

10 appear to conflate the doctrines of misnomer and discoverability, since misnomer applies despite the passage of any limitation period. To impose an "evidence of effort" requirement into the misnomer doctrine would effectively impose a discoverability test into the misnomer doctrine, which is not supported by Lloyd and Ormerod. 42 From a policy perspective, there is a reasonable argument that the doctrine of misnomer applies despite the passage of a limitation period. If a party knows from the outset that it is the intended defendant, the plaintiff intends to name the defendant, and the "litigating finger" points at the intended defendant, it could be unjust to allow the defendant to permit "one party to perhaps escape its possible liability by relying upon a technical Limitations Act defence." [34] Even if misnomer applies, the court retains a residual discretion to refuse to permit the correction of a misnomer. The most important factor to consider in exercising this discretion is whether there is non-compensable prejudice, however, the absence of prejudice does not guarantee an amendment (Mazzuca at para. 42; Ormerod at paras ; Skribans at para. 47; Mohabir at para. 29). As the scope of what the courts consider a misnomer broadens beyond a classic misnomer in which the claim contains a minor spelling error of the defendant s name and is personally served upon the intended but misnamed defendant, it is appropriate to take a correspondingly wider view of the court s discretion to refuse to correct the misnomer (Ormerod at para. 31; Patrick at paras ). [35] Other factors which the court should consider in determining whether to exercise its residual discretion include: whether the defendant was misled; any inordinate delay in correcting the name and seeking leave to amend by misnomer, which may be fatal and requires a reasonable explanation; lack of notice including how long notice of the claim was given to the proposed defendants after the cause of action and the passage of the presumptive limitation period; whether the proceedings are at an early or advanced stage; and the extent of the misnomer s departure from a mere irregularity in all of the circumstances (Ormerod at paras ; Skribans at paras ; Mohabir at paras. 15, 20-23; PCS Security at paras ; Urie at para. 108; Patrick at paras ). [36] If the doctrine of misnomer does not apply, then the Limitations Act, 2002, S.O. 2002, c.24 may apply, including: the basic limitation period of 2 years (s. 4); the discoverability provisions (s. 5); and section 21 which provides that, except in the case of misnomer or misdescription of a party, if a limitation period has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding (Patrick v. Southwest Middlesex (Municipality), 2017 ONSC 17 at paras. 10 and 49). [37] The present case has some similarities to PCS. In PCS, A.K. Mitchell J. permitted the substitution of two proposed defendants who were retained by the defendant PCS to conduct an annual a fire sprinkler inspection. The plaintiff initially named one John Doe defendant as a precaution in the event that the defendant PCS had retained a technician or entity other than the named inspection company in the year leading up to the date when a

11 faulty sprinkler head caused water damage. In finding that the litigating finger was pointed squarely at the proposed defendants, Mitchell J. cited the following identifying particulars from the statement of claim with respect to the defendant John Doe at paras. 47 and 49: 47. (a) Para. 7: The defendant, John Doe, is either an individual, a sole proprietorship or a corporation, the particulars of which are known solely to the Defendant PSC [sic] Security Systems Inc., and at all material times carried on business as a provider of sprinkler system installation, inspection and maintenance services. (b) Para. 9: The Defendant, PCS Security Systems Inc., was hired by the Plaintiff, Waterloo Textiles, to perform annual fire alarm/sprinkler and fire hydrant testing and inspections throughout the building located at 215 Queen Street West, Cambridge, Ontario. An inspection of these systems was conducted on June 30, 2011, approximately three and a half months prior to the subject incident. (c) Para 10: The Plaintiff, Waterloo Textiles, pleads that PCS Security Systems completed testing and maintenance of the sprinkler systems on an annual basis together with a representative on behalf of the Defendants, Dickie's Sprinkler Service Incorporated and John Doe. Particulars of the defendants alleged breach of contract warranty statutory duty and/or negligence are contained in para. 11 of the statement of claim and such allegations relate to all three defendants including John Doe. 49. From a review of the statement of claim, it is readily apparent that the proposed defendants upon reviewing statement of claim would have known that they were the intended defendants. The proposed defendants would have known: 1. That they were the individuals who had conducted an inspection of Sprinkler System on June 30, 2011 and prepared a report; 2. That they had subcontracted with PCS Security, correctly named in the statement of claim as a defendant, to perform the annual inspection of the Sprinkler System; 3. That they had attended at the Premises having the municipal address correctly stated in the statement of claim. [38] In McDonald v. Hoopp Realty Inc. (c.o.b. Northgate Shopping Centre) ONSC 6089, M.G. Ellies J. granted leave to amend the plaintiff s claim to name the proposed defendant G4S, initially named as John Doe Corporation. G4S was responsible for

12 inspecting the area where the plaintiff was allegedly injured. At paragraph 19, Ellies J. held that the litigating finger was pointing at G4S due in part to the fact that G4S was the only party obligated by the terms of its contract to inspect the area: No doubt, more could have been done to identify G4S as the entity in charge of inspecting the area in which the plaintiff says she fell, as opposed to designing, building, operating, maintaining, or repairing it. However, in my view, G4S would have known by reviewing the claim that it was an intended defendant. According to the evidence, G4S was the only party obligated by the terms of a contract with the mall defendants to perform "regular and continuous patrols of [the mall], including but not limited to the...interior and exterior" of the mall. Although the contract only required G4S to report "security[-]related issues", a representative of the mall defendants testified during his examination for discovery that, by convention if not by contract, G4S was also required to report maintenance-related issues, such as the presence of ice and snow. It is my view that, when reading the allegations contained in the statement of claim, set against the backdrop of the responsibilities it assumed under the contract, G4S would have known that the litigating finger was pointed at it. Dufferin s Standing [39] The Proposed Defendants submit that a misnomer motion may only be brought by the Plaintiffs, Loblaw, and that Dufferin, a Defendant, does not have standing or should be otherwise prohibited from bringing this motion. In every misnomer case referred to me by counsel, the plaintiff brought the motion seeking to correct a John Doe defendant with a proposed identified defendant. Counsel were unable to refer me to any case law where a misnomer motion was brought by a defendant or where a defendant was prohibited from seeking such relief. [40] Considerable submissions were made with respect to why Loblaw did not bring its own misnomer motion for leave to add the Proposed Defendants and its position with respect to Dufferin s motion. It remains largely unexplained and is unclear why Loblaw did not bring a motion or attempt to substitute the Proposed Defendants to the Main Action. However, Loblaw s counsel advised the court that Loblaw supports Dufferin s motion and is satisfied that, with the naming of the Proposed Defendants, all of the required Defendants in the Main Action will have been named and identified. [41] The wording of Rule 5.04(2) does not restrict the ability to bring a misnomer motion to any specific party nor does it prevent a party other than a plaintiff from bringing such a motion. A plain reading of Rule 5.04(2) and the liberal interpretation required by Rule 1.04(1) leads to the conclusion that Dufferin should not be prevented from bringing this motion. This conclusion is supported by the fact that Loblaw, although not bringing the motion, supports Dufferin s motion and the correction to name the Proposed Defendants in the Main Action.

13 [42] I do not accept the Proposed Defendants submissions that Dufferin s motion is an abuse of process or that Dufferin should instead bring a motion seeking leave to issue a Third Party Claim. Rule 1.04(1) requires a liberal interpretation of the Rules to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits and Rule 1.04(1.1) requires the court to make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved. In my view, considering and determining the issues in dispute on this motion brought by Dufferin, supported by Loblaw, with consideration of all of the relevant circumstances and factors, including the potential operation of limitation periods, notice and delay on the current comprehensive record supported by the written and oral submissions of the affected parties represents the just, most expeditious, least expensive and proportionate way forward in the circumstances. [43] In my view, the fact that Dufferin, not Loblaw, brings this motion is properly considered in the context of the court s residual discretion to refuse to allow a correction based on misnomer. Specifically, this falls under the extent of the misnomer s departure from a mere irregularity in all of the circumstances and the fact that a broader exercise of the court s discretion to allow a misnomer calls for a correspondingly wider consideration of its discretion to disallow a misnomer. Accordingly, I conclude that Dufferin is not prevented from bringing this motion on the basis of lack of standing or otherwise but that the fact that Dufferin is the moving party is a factor to consider under the court s residual discretion. [44] I now turn to the application of the above principles and factors to the Proposed Defendants. Application to TIL and TIES. [45] There has been considerable disconnect and confusion regarding which of the Toronto Inspection Entities provided services with respect to the Project and the Slab. In my view, this is largely the result of how the Toronto Inspection Entities have arranged and conducted their affairs generally and how they provided services on the Project. This motion has served to clarify some of these ambiguities. [46] Loblaw states that at all material times they understood that it was Toronto Inspection providing concrete quality testing, inspection and reporting services with respect to both Phases of the Project including the Slab. Loblaw and Dufferin now allege that each of the Toronto Inspection Entities provided these services. [47] Although it is unclear whether there is a formal legal relationship between Toronto Inspection, TIL and TIES, it is clear that they do not operate at arm s length, that there is overlap in their operations and significant connections and relationships between each of them. Not only are the Toronto Inspection Entities controlled by a father and his two sons

14 but they share staff and TIES provides laboratory testing services to TIL. Further, in the Related Actions where both TIL and TIES are named, TIL has crossclaimed against every other defendant except TIES. In addition, TIL and Toronto Inspection have previously shared the same corporate address and phone number, TIL appears to have been originally founded under Toronto Inspection s name and staff members of Toronto Inspection were transferred to TIL when it was incorporated. [48] Sanjay, TIL s principal, in his affidavit sworn March 30, 2017 and on crossexamination, alleges that only TIL, not Toronto Inspection or TIES, were involved in the Project. Sanjay states that TIL provided geotechnical testing and inspection services including field and laboratory testing of concrete with respect to both Phases. Sanjay also states that TIL attended on every concrete pour to take samples and provide field and laboratory reports to LBL (the Reports ). [49] During the course of the Project, Loblaw received numerous reports purportedly originating from both TIL and TIES, on TIES letterhead, reporting test results conducted by employees of TIL and signed by Sandeep, the principal of TIES. This includes every Report between December 18, 2006 and January 18, 2008 with respect to concrete tests during Phase 1. More recently, a Report of tests conducted in November 2013, after the commencement of the Main Action, was provided by TIES, conducted by Alex of TIL and signed by Sandeep. [50] Between November 11-19, 2010, during Phase II, over 2 years prior to the commencement of the Main Action, the Toronto Inspection Entities exchanged s with Turner, Loblaw and other parties regarding site testing at the Facility regarding concerns expressed by Metro Concrete related to the Slab. On March 16, 2011, Loblaw sent an to TIL regarding the breakdown of concrete pads at the Facility and requested that TIL have someone take core samples and verify the quality of concrete. [51] With respect to the litigation, Toronto Inspection is the only one of the Toronto Inspection Entities named as a Defendant to the Main Action. Toronto Inspection is not named as a defendant in any of the Related Actions. One of TIES or TIL are named in 5 of the Related Actions. TIES and TIL have been named in 4 of the Related Actions, 3 of them the same. [52] The Notice of Action and Statement of Claim were issued on April 4 and May 15, 2013, respectively and served upon Toronto Inspection on May 15, The first of the Related Actions to name any of the Toronto Inspection Entities was the Turner Action, which named both TIES and TIL. The Turner Action was commenced on April 15, [53] Turning to a consideration of whether the litigating finger was pointing at TIL and TIES, in addition to the general paragraphs regarding the John Doe Defendants, the following identifying factors are set out in the Statement of Claim:

15 i.) ii.) Para The John Doe Defendants are consultants, inspectors or other whose identities and addresses are currently unknown to Loblaw, who were responsible for the design inspection, field reviews and/or related work for the construction of the Distribution Centre, including without limitation work related to the concrete slab on grade. Para. 56 Loblaw states that the Concrete Slab was designed and constructed in a substandard manner, utilizing an inappropriate design and/or inappropriate materials and/or construction methods, which caused numerous defects and deficiencies in the Concrete Slab (the Concrete Slab Deficiencies ). Furthermore, the Concrete Slab was inadequately inspected. [54] In my view, reading the Statement of Claim, TIL and TIES would conclude, considering all of the circumstances, that the litigating finger was pointed at them. All 3 of the Toronto Inspection Entities are involved in and linked to the Project, the Slab, the Main Action and/or the Related Actions. TIL and TIES would know from the scope of work they performed on the Project, as evidenced by the Reports and admitted by Sanjay, that they were the inspectors responsible for the alleged inadequate inspection of the Slab referred to in the Statement of Claim. [55] Similar to McDonald, the litigating finger was pointing at TIL and TIES due in part to the fact that testing and inspection of the Slab was their responsibility together with Toronto Inspection. I am satisfied that the reasonable person in the same position as TIL and TIES would conclude upon reading the Statement of Claim that it refers to them but that they were simply not named together with Toronto Inspection as Defendants. The fact that TIL and TIES have been named in most of the Related Actions further supports the conclusion that the Statement of Claim referred to them. [56] While Loblaw named Toronto Inspection in the Main Action on the mistaken but reasonable belief that only Toronto Inspection had been involved in the Project, I conclude that Loblaw always intended to name any and all of the Toronto Inspection Entities which conducted the inspections and testing, including TIL and TIES. While it is arguable that Loblaw should or could have named all 3 Toronto Inspection Entities in the Main Action, as the Reports demonstrate, it is understandable and reasonable to conclude that Loblaw may have been misled by the overlapping, interchangeable and ultimately confusing involvement of all 3 Toronto Inspection Entities, often in the same Report and with respect to the same inspections and tests. Further, given the overlap between and among the operation and management of the Toronto Inspection Entities generally and on the Project, it is reasonable to conclude that TIL and TIES were aware of the Main Action at or around the time it was served on Toronto Inspection. In this regard, I reject Sanjay s evidence that, even as the Toronto Inspection Entities were continuing to test the Slab, he was not aware of Loblaw s potential claim or the Main Action because it was served on Toronto Inspection. [57] The Toronto Inspection Entities argue that there should not have been any confusion

16 given their existing relationship with Loblaw including work on previous projects and their presence at Project site meetings. However, the Reports provide sufficient evidence that each of the Toronto Inspection Entities were used in an interchangeable and overlapping manner that would not necessarily have been clarified by a representative of any of the 3, perhaps under the guise of working for another, attending a site meeting. Further, if Loblaw was unable to sort out which of the Toronto Inspection Entities they were dealing with, or that there was more than 1 entity, Dufferin, which delivered concrete outside of the Facility, would have had no or little reasonable prospect of doing so. In my view, as in PCS, it was reasonable for Loblaw to name Toronto Inspection, the entity they traditionally dealt with, but out of an abundance of caution, name the John Doe Defendants given that, on a large, complex construction project such as this one, it is reasonable that they would not have been aware every subcontractor retained by other contractors during the extended course of the Project. [58] Even though I have found that misnomer applies to TIL and TIES, I must consider whether or not to exercise the court s residual discretion to decline to apply the doctrine of misnomer. The primary factor is whether TIL and TIES would suffer non-compensable prejudice as a result of being added to the Main Action. In my view, TIES and TIL have not established that they would suffer non-compensable prejudice if named in the Main Action. [59] This is not a case where TIL and TIES, due to the passage of time or lack of notice, have been deprived of an opportunity to inspect the Slab in a timely manner, conduct investigations, make inquiries or preserve evidence. In fact, TIL and TIES, along with Toronto Inspection, have been directly involved in the testing and inspection of the Slab throughout both Phases, after the completion of the Project and even after the commencement of the Main Action and most importantly, before repairs were made to the Slab. In fact, their inspections and testing assisted in the identification and discovery of the Slab deficiencies. Therefore, the Toronto Inspection Entities, perhaps more than any other party, have direct, first-hand knowledge and information of the issues with respect to the alleged deficiencies and have not been deprived of any opportunity to discover information relevant to their defence. [60] TIL and TIES submit that they would suffer considerable non-compensable prejudice given that currently, they are only exposed to a lower amount of damages that flow through other Defendants who have claimed against in them in the Related Actions. They argue that if they are added to the Main Action they will be exposed to the full $15,000,000 claimed by Loblaw. TDI also makes this submission. [61] The Proposed Defendants rely on Bartucci v. John Doe, [2003] O.J. No (Div. Ct.) in which the Plaintiffs issued a Statement of Claim against their own automobile insurer and an unidentified driver named as John Doe. The insurer then commenced a Third Party Claim against the other, known driver, Bauldry, who was not a party to the main action. The Plaintiffs subsequently brought a motion for leave to add Bauldry as a

17 defendant to the main action. [62] The Divisional Court held at paragraphs that being named as a defendant to the main action would cause Bauldry considerable prejudice: [15] The State Farm policy issued to the plaintiffs must contain the standard unidentified motorist endorsement contemplated by s. 265(1) of the Insurance Act, R.S.O. 1990, c. I.8, Part VI as amended, and by s. 2(1)(c) of Part C of Reg. 676, R.R.O. 1990, as amended. Certain conditions follow. As long as Mr. Bauldry remained only a Third Party and not a party defendant, he was only liable if State Farm was liable. State Farm is liable only if the unidentified motorist is 100 per cent liable. If Mr. Bauldry is one per cent-100 per cent liable for the accident, State Farm has no liability to the plaintiffs and, therefore, has no occasion to seek to recover from Mr. Bauldry under its Third Party Claim. This set of circumstances is often referred to as the "one percent rule. [16] However, if Mr. Bauldry is a party defendant and is one per cent-100 per cent liable, State Farm pays nothing to the plaintiff and Mr. Bauldry pays 100 per cent to the plaintiffs (absent any contributory negligence on their part) with the right to seek contribution under s. 1 of the Negligence Act, R.S.O. 1990, c. N.1 from the unidentified driver on any split of liability between Mr. Bauldry and the unidentified driver. This results in considerable prejudice to Mr. Bauldry. [63] Bartucci is distinguishable on its specific facts. In the present case, the Proposed Defendants are not affected by the operation of the Insurance Act or the one percent rule which was central to the Divisional Court s finding of considerable prejudice in Bartucci. As set out in the excerpt above, because the insurer was liable only if the unidentified John Doe driver was 100% liable, if Bauldry had been added as a defendant to the main action and subsequently found to be 1%-100% liable, the insurer would had no liability to the plaintiffs. This would have left Bauldry 100% liable to the plaintiffs (absent contributory negligence) with the right to seek contribution from the John Doe driver but not the insurance company. That is not the case here. If the Proposed Defendants are added to the Main Action and are found to be 1%-100% liable, they would not lose the ability to assert crossclaims for contribution and indemnity against any other Defendants, including Dufferin. [64] Further, in Bartucci, Bauldry, an individual, would have lost any ability to claim against an insurance company for contribution and indemnity. In the present case, the affected parties are commercial entities and there are no claims under insurance policies. [65] It is true that, currently, any liability of the Proposed Defendants in the Related Actions is contingent on the Identified Defendants being found liable in the Main Action and that if the Proposed Defendants are named in the Main Action they would be directly exposed to Loblaw s full claim. However, being added to the Main Action does not

18 necessarily increase the potential amount of the Proposed Defendants liability given the existing claims against them in the Related Actions, especially TIL and TIES, who are defendants in 5 of them. In addition, being named to the Main Action would not restrict the Proposed Defendants from claiming contribution and indemnity from all other Defendants to the Main Action and defendants in the Related Actions, all of whom TIL and TIES have already claimed over against. [66] In addition, any non-compensable prejudice suffered by TIL and TIES is mitigated by the fact the Defendant Toronto Inspection, a non-arm s length party with significant overlap and integration, is already directly exposed to the full amount in the Main Action claimed by Loblaw. Accordingly, based on my consideration of the factors and circumstances above, TIL and TIES have failed to establish that they would suffer noncompensable prejudice. [67] Turning to the other factors, I agree with TIL and TIES that this is generally more than a classic case of misnomer and one where Dufferin requests the exercise of a broader scope than the proposed correction of a mere irregularity. This includes the fact that Dufferin, not Loblaw, brings this motion. This is generally a broader exercise of the court s discretion and calls for a correspondingly wider consideration of the court s discretion to deny it. However, in my view, the naming of Toronto Inspection, but not its non-arm s length entities TIL and TIES, largely on the basis of the ambiguity and overlap in their operations, moves this misnomer towards correction resulting from an omission or exclusion of a non-arm s length party which in my view limits the scope of the correction that Dufferin is seeking. Further, I must consider the delay in Loblaw and then Dufferin taking steps to correct the misnomer and bring this motion. All of this must be considered in the larger context of the other relevant factors and circumstances. [68] In my view, the factors in favour of allowing the correction on the basis of misnomer with respect to TIL and TIES militate against the factors in support of denying it. This includes the lack of non-compensable prejudice, the fact that TIL and TIES have been aware of the deficiencies with the Slab since they were first discovered, long before the passage of the presumptive limitation period on June 20, 2014 and arguably before it even began to run and have been involved with testing and inspection of the Slab at all material times. In addition, this action is still at an early stage, and TIES and TIL have each already defended and brought crossclaims in 4 of the Related Actions which involve substantially the same issues as in the Main Action. [69] As far as the delays since July 2015 by Loblaw and then Dufferin in bringing this motion, I am not satisfied that they are fatal to Dufferin s motion. Dufferin was reasonably reliant on Loblaw starting in or about July 2015, who, notwithstanding representations that they would move to amend their Statement of Claim, did not do so. I also conclude that Dufferin always intended to seek to add the Proposed Defendants and that, in all of the circumstances, this delay has not resulted in any prejudice to TIL and TIES. Also, the fact that Toronto Inspection is already a Defendant combined with the non-arm s length

19 relationships of the Toronto Inspection Entities helps to further mitigate the delay. [70] Given that I have concluded that misnomer applies to TIL and TIES, the two-year limitation period pursuant to the Limitations Act does not apply. The case law is settled that once it is found that the litigating finger test is met, it would be inappropriate to impose a due diligence requirement or evidence of effort that may permit parties such as TIL and TIES who knew or should have known upon reading the Statement of Claim that they were proper defendants to potentially escape liability on the basis of a technical Limitations Act defence. Further, as all parties acknowledged, nothing prevents TIL and TIES from pleading limitations defences in the Main Action. [71] Finally, to deny Dufferin s motion with respect to TIL and TIES would be inconsistent with a liberal reading of the Rules to secure the just, most expeditious and least expensive determination of the Main Action on its merits as required by Rule 1.04(1). All 3 of the Toronto Inspection Entities were involved in the Project, do not operate at arm s length, provided services with significant overlap and integration, have had notice of the Slab deficiencies since at least 2 years before the expiration of the presumptive limitation period and helped identify the extent of the Slab deficiencies. They are necessary parties to this action and are already involved in these proceedings, Toronto Inspection as a Defendant, and TIES and/or TIL as active defendants in 5 of the Related Actions. It would not be just or expeditious nor would it lead to a determination of the Main Action on its merits if TIES and TIL are, in these circumstances, permitted to avoid participation in the Main Action on the basis of their own ambiguous Reports and operations and/or a technical limitations defence. [72] Having considered all of the relevant factors and circumstances, I conclude that Dufferin s motion with respect to TIL and TIES should succeed and it is appropriate to grant leave to amend the Statement of Claim to correct John Doe Nos. 1 and 2 to name TIL and TIES as Defendants to the Main Action. Application to TDI [73] The facts with respect to TDI and the application of the relevant factors above are materially different from TIL and TIES in many respects. [74] TDI has only been named as a defendant in the Carwell Action which was commenced on May 8, The service of the Carwell Action on TDI in October 2015 was the first time that TDI learned of the Main Action and the alleged deficiencies with the Slab. This was more than 1 year after the expiry of the presumptive limitation period, over 2 years after the commencement of the Main Action and over 4 years after TDI completed its work on the Project. [75] Reviewing the Statement of Claim, there are no identifying particulars specific to TDI including no reference to insulation. However, paragraph 18 refers to the John Doe